Archive for March, 2007

Moving the giants

Friday, March 30th, 2007

iTunes now allows you to buy an album at a discount if you’ve already bought individual songs from that album. That is, if you’ve already bought a 99-cent song, you can get the rest of the album at a 99-cent discount. Bought two songs? 1.98 discount.

According to The Wall Street Journal, “…Apple negotiated agreements with its partners in the recording industry to offer its new album-purchasing service….” That pretty much means that Apple wanted to do it before but the music industry wouldn’t let them.

One of the things I’ve noticed about Apple’s handling of its dealings with the music industry is that they never want to do anything until all of the Big Four labels are on board with it. They probably made this deal with the labels one at a time, but they didn’t want to go to the public and say, “You can buy the rest of some of your albums!”, as that would A) confuse consumers, and B) rub it in the faces of the labels that had not yet agreed.

It’s probably a similar situation with allowing DRM-free (i.e. unlocked) music. Surely some of the independent labels would allow unlocked music, (and in fact much of the indie music you can buy locked on iTunes you can buy unlocked on other web sites), but Apple is not going to make that change until all four of the big boys agree to it.

Primary rule of business: Don’t advertise your warts. Thus, don’t do anything that forces you to point out what’s wrong with your system.

If they were to unlock just part of their music catalog, they would have to change the interface of the store, and ironically draw far more attention to the fact that they use DRM at all. As it is, I would guess that the vast majority of iTunes users never even notice the DRM. They buys songs, put them on their iPods or burn them to CDs, and possibly aren’t even aware that the locks are there. For Apple to have some songs locked and some unlocked, they would have to add some sort of icon or visual indicator to the various songs indicating whether they were locked or not, and then all those people would be forced to ask themselves “What does that little padlock symbol mean?” That is the last thing Steve Jobs wants his customers asking, no matter how much he would like to get rid of DRM altogether.

So this latest victory for Apple (and consumers) is a good illustration of the vision of Steve Jobs’ business model. If it were up to him these features would probably have been available long ago; but the reality is that he is, one step at a time, making huge changes in the business model of a multi-billion-dollar industry that is controlled by other people. It’s a herculean task in ways, and though it is taking time, Apple, Inc. is succeeding where others have failed miserably.

Update: Oh, suuure. The minute I write this Apple announces that they’re going to offer unlocked music from just one of the big four (EMI)

Free Coffee!

Saturday, March 10th, 2007

So what, exactly, is it that makes this country so powerful? Why do the people of this country have so damned much compared to basically everybody else on the planet? Are we that much smarter? More resources? Maybe God just plain likes us better? None of those. The answer is quite simple, really: historically, we have been the most free people on the planet.

Okay, okay, I’ll give some credence to the resources question, but only a small amount. The Soviet Union had massive resources, in both people and raw materials, but it collapsed under its own bloated weight. The Arab nations, for that matter, are currently sitting right smack on top of the largest stores of valuable fuel resources on the planet, but their elites reap the spoils while the “little people” muddle along as best they can. The nations of Europe collectively have huge resources upon which to draw, but have hobbled themselves in bureaucratic mandates almost custom-designed to hold them back — such as France’s legally entrenched 35-hour work week. Meanwhile Hong Kong, with little in the way of natural resources, is an economic powerhouse.

Simply put, no central planning can ever match the pure creative force of millions of individuals each working for their own personal benefit. Social theorists can come up with all the wonderful utopian pipe dreams they like, and none will come close to equalling the problem-solving might of what Glenn Reynolds calls the “Army of Davids”.

I once got into a political discussion with a friend, who in response to a similar statement, claimed “Our government is the free market system.” In a minor technical sense he is right, but our republican (small “r”) government is such a poor free-market system as to make the statement false for most every purpose. Why? It’s a matter of pure speed. A modern computer is capable of making billions of calculations per second, and that is where its power lies. If the exact same computer were only able to make a single calculation once per day, it would be just as capable of running a program as the fast one, but running the program would take so long that the thing would be utterly useless. Such a device would only technically qualify as a “computer”. Thus it is comparing government control, even that of as free a one as our own, with free markets.

In this country, thousands of companies put out millions of products. In fact, anyone who chooses to can bring virtually any product the want to market and try to sell it. All you need do to witness the sheer power of the free market is walk into a Wal-Mart. Every single item purchased by all the people going to all the stores throughout the entire country is contributing to the increasing efficiency of the system. If I go to the store and buy toilet paper, I have made a decision of one brand over the other. That brand, for whatever reason, is my preferred balance of quality, price, and availability, and so forth over all its competitors. Countrywide, the more popular products (generally, though not always, the “better” ones) remain available, and the maker profits from that, while the lesser products quietly disappear off the shelves in favor of some newer contender to the throne (ahem). In a full shopping cart I am making dozens of such decisions. The end result of this is that the United States has developed an almost mystical ability to produce goods that people want. Other countries are often known for particular products — France has their wine, for example — but the good ol’ U.S. of A. is such a powerful marketing force that it has become almost impossible to resist. (France, again, tries through such measures as passing laws limiting the amount of English-language music that can be played on the radio — thus forcibly increasing the “demand” for French music!)

By contrast, the government is a market in which each one of us is able to make only a handful of decisions, given only one or two choices for each of those decisions (often a choice between “this one” or “nothing”), and we only get to make those few decisions every two years of so. Even then, we’re generally not making decisions directly, but choosing who gets to make the decisions for us! Compare that to all the marketplace decisions you make in a single week, from what groceries to buy, to what TV show to watch, to the workplace where you spend eight or more hours a day.

There is a movie from the 1980s called Moscow on the Hudson, in which Robin Williams plays a Soviet defector now living in New York City. In one scene he is asked to go to the store and buy coffee. He blithely walks into a supermarket and finds the coffee aisle. Wait… the coffee what??? Think of how much you take for granted when you fail to even bat an eyelash at the thought of that many choices for a single product. Williams’ character has a breakdown in the middle of the store, because his mind can’t quite grasp the concept of so many choices; he’s basically staggering down the aisle looking for something simply marked “coffee” — which one? Which One???

Coffee drinkers, please choose: would you rather have the options available to the average supermarket-going American, or those that the Soviet government chose to make available to its people? The answer seems obvious, doesn’t it? There may be brands of coffee that you like or dislike, but in the market system that produces all those options, even the mediocre ones are bound to be better than that theoretical COFFEE brand coffee that our Russian friend drank back in the Old Country.

So why, when confronted with a choice over their own health care, do so many people say “I’ll take the government monopoly, thanks”? You wouldn’t do it for coffee; Hell, you wouldn’t do it for toilet paper. Why would you do it for heart surgery or medication? I could ask the same question of a number of instances where we have given over control to the government — such as educating our children.

Rather than discussing metaphors, let’s compare that million-test development system to a government monopoly such as… the United States Post Office. Now some readers are thinking “fish in a barrel” right about now, but have you ever really examined why that’s the case? A few weeks ago I went to my local Post Office to mail a package. I walked in, and there were two people waiting ahead of me, and one employee behind the counter. He was looking for something among a few stacks of letters — I assumed for the woman standing at the counter. We stood there for about five minutes, during which time the line grew until there were about seven or eight more people behind me. Finally, the postal worker put down the mail he was looking at (not having found what he was looking for, it seemed), strolls over to the counter, and says to the woman in front, “Can I help you?”

There is one reason, and one reason only, that a guy with that work ethic gets to keep his job — his employer has no competition. As time goes by, stamp rates go up and up and up, with no appreciable improvement in service; in fact service has diminished. Years ago you used to have a particular mail carrier who had the same route every day. This lead to a certain efficiency as the person learned the route well, and came to know who the people along that route were. Today, the mail carrier seems to change every couple of weeks, if not every day; they get rotated through different routes, so they are perpetually learning new routes. When I was a kid we got two mail deliveries every day — one in the morning and one in the afternoon. At the house where I grew up (still my parents’ place) there is now one delivery, and it comes later and later in the day. At work in downtown Chicago our mail carrier changes all the time, while the same UPS carrier shows up virtually every day. UPS gets there in the early afternoon. The U.S. Postal Service frequently delivers the mail after we’ve all left for the evening — I show up the next morning and find yesterday’s mail in a pile outside the door.

A year or so ago I sent a letter to somebody from work. This was tax-time, so roughly March or April of 2006. Nine months later (no exaggeration) we got the letter back as undeliverable — addressee unknown. Now I can understand not finding a recipient who has moved without a forwarding address, but it’s laughable that it took them nine months to figure it out. Who’s fault is this? It doesn’t matter, because there’s only one Post Office — and with no accountability, it will never appreciably improve.

Meanwhile, the only area of the Postal Service that has any real innovation whatsoever is that in which they have competition — that is, where consumers have other options such as UPS or FedEx. Years ago there were government regulations preventing such private shipping companies from operating their own planes — the then-Federal Express had to send packages on commercial passenger airliners, which greatly limited their scheduling options. Three guesses what happened when the federal government decided to get out of the way and allow shippers to fly their own planes on their own schedules… business took off.

You may find it strange that I started out talking about the differences between the USA and other countries, and then gave examples from the US. The illustration in those examples applies to government programs in general — and thus the countries with the least government control has a big advantage.

Unfortunately it is the nature of power to seek more power, and it is the nature of governments to grow. The men who founded our government two hundred years ago would be stunned1 at the invasiveness and control of today’s federal government: income taxes, mandatory government schooling2, gun control — all tyranny. But we have been inured to them, because they are so entrenched that it’s difficult to imagine a world without them. Today people scream about the possibility that the government might be tracking phone calls in their attempts to find terrorists, but most of them think nothing about the invasiveness of being forced by law to hand the government a detailed dossier on their personal finances every April 15. (They’ll gripe about the chore of it, or course.) That’s not even the government looking in — they force you to report on yourself! Not even Orwell saw that one coming.

We are still one of the most free countries in the world, but our advantage is slipping. Again with things being such a way for so long that it’s hard to imagine it different: I believe that the people of this country simply assume that the USA will remain as powerful as it is because they can’t imagine that changing. They don’t think about why we are powerful, so they don’t take care of those things that make us strong. This is the invidious nature of socialism and government control — when people forget how they got where they are, they are easier prey to the devil’s contract: What is it you desire? Less responsibility? Free health care? You neighbor’s land, perhaps? We’ll give you anything you want for yourself; all it costs is your soul.

1 — Not quite true. They were quite aware of the nature of government, and many of them would have expected it. Perhaps “dismayed” is the better word.

2 — Unless you have lots of money and can afford to pay for a private school on top of the taxes that pay for the government schools. (Which political party is it that keeps claiming to be looking out for the little guy?)

Some updating required

Tuesday, March 6th, 2007

In a little over a week I’m buying a house.

It’s a sound little 50’s ranch — “the bones are good” as the real estate people put it — but it’s in need of some cosmetic updating. In the basement, for example, is a heavily institutional-looking flourescent light fixture that is the spitting image of the lighting in my old grade school. The basement bathroom I refer to as the “seventies horror” — bedecked as it is with brown plaid wallpaper.

The most interesting detail, however, is the upstairs bathroom. It’s entirely tiled in green, which in and of itself isn’t so bad, except…

Well… the tile question looks precisely as though somebody had taken bars of Irish Spring soap, hammered them flat, and polished them. You know… that pale pastel green with the ghostly white swirled through it. It’s kind of nice, kind of disturbing, and like a car wreck, you can’t look away.